The Khaleeji, an Arabic term that can be translated as “of the Gulf”, is the proposed common currency of the members of the Gulf Cooperation Council or GCC. Although it was officially turned down by the International Monetary Fund or IMF in 2009 and again in 2010, the moniker, along with its adoption, is slowly getting re-developed. And, as it appears, there may be hope for it once more.
Aside from the basics, here’s more information about the proposed common currency:
- When the name (but not the idea of a GCC common currency) was rejected by the IMF due to being a rather unfamiliar term even for some Arabs, dinar was considered a substitute; for one, dinar is a used word in the Arab world and for another, dinar is included in the Quran.
- There were speculations about it being a currency that was intended to be backed by gold; this is brought about by the strong opposition, headed by the Islamic economic jurisprudence, against riba (i.e. the Arabic term for interest).
- Chief members of the GCC stated that it was proposed to be associated to the US dollar; for a currency trader, it is an attractive investment.
- Among the signals that its official adoption is underway are: (1) policies in the financial sectors and government laws converged and (2) GCC member countries are gradually establishing financial independence (i.e. paying back their central bank loans).
- According to a May 05, 2009 agreement during a GCC consultative summit that was held at Riyadh’s Daraeya Palace, it was the responsibility of Saudi Arabia; if it were eventually circulated, a Gulf Central Bank will be stationed in the Middle Eastern country to overlook relevant concerns.
- Granted official adoption, it becomes the only legal tender in Bahrain, Kuwait, Qatar, and Saudi Arabia; although they are GCC members, United Arab Emirates and Oman have announced that they will not adopt the common currency.
- It was Nasser al-Kaud, GCC’s deputy assistant for economic affairs, who released the statement in 2010 that due to two reasons, its official adoption on the specified date will not push through; the two reasons include: (1) lack of support from member countries of the GCC and (2) financial crisis in the Middle East.